Chip App Review 2023 – Forbes Advisor UK

Chip app at a glance

Chip is a digital savings and investment app, founded in 2017 with the help of crowdfunding. It is not a bank but it is fully regulated by the Financial Conduct Authority (FCA) and has around half a million active accounts.

Customers can open and manage their account through the app and it is linked to their main bank account via open banking communications technology. 

Chip offers four savings account options: instant access, easy access, the 90-day notice account and a savings account that offers the chance to win up to £10,000 a month. It also offers investment accounts and a stocks and shares ISA. Savers can get started with deposits from just £1 and invest up to a maximum of £250,000.

But Chip works in a different way to other savings accounts. It pools customers’ deposits and uses that combined buying power to negotiate with savings providers to find top market rates. 

In theory, it means once savers have joined Chip they shouldn’t need to keep switching their savings provider or account to chase the best rates, as effectively Chip does that on their behalf.

The Chip app offers an artificial intelligence (AI) tool called autosave via the app. It’s built on an algorithm which analyses a customer’s spending habits and bank balance and estimates how much they can afford to save or invest.

Chip’s autosave function then automatically transfers small quantities of money on a regular basis into the relevant accounts. The idea is that savers don’t miss the small amounts of money leaving their account – and it doesn’t impact their budget or spending – but over time their savings or investments will build up. 

What interest rate is paid on savings deposits?

Chip offers four deposit savings accounts:

• Instant access – 3.55% AER variable (paid monthly). With this account you can withdraw and pay in money instantly
• Easy access – 1.1% AER variable (paid daily with compounding interest). Money can be added or withdrawn at any time 
• 90-day notice account – 2.95% AER variable (paid monthly). Savers can withdraw cash by giving 90 days notice
• Prize savings account – offers the chance to win up to £35,000 in cash prizes each month. Every £10 held in the account (where a savings balance is at least £100) gets one entry into the monthly prize draw. There is one grand prize of £10,000, plus 1,301 smaller prizes paid out monthly. Deposits and withdrawals from the account are instant.

*Savings rates are accurate at the time of writing (5 April 2023), but rates are variable and subject to frequent change.

What fees and charges apply with Chip?

There are no monthly or annual fees on any of Chip’s deposit savings accounts. But if savers want a regular recurring saving amount there is a 25p per save charge, and the autosave feature (which uses AI) charges 45p per save transaction. 

The charges could be disproportionately high if you are only saving small amounts.

How does Chip’s investment account work?

Chip offers investment account options:

• General investment account (GIA) – annual platform fee of 0.5% (minimum £1 per month charge). Investors can pick from a range of highly diversified funds from asset manager BlackRock, as well as FTSE100 and S&P500 Tech index funds. Fund manager charges apply. Charges apply for autosave and recurrent save features at 45p per save and 25p per save respectively

• ChipX – a premium account which charges £5.99 per month (charged every 28 days) or £65.05 if paid annually. With ChipX, investors get a much broader choice of funds, including cryptocurrency and gold funds, and the autosave and recurring save features are free. Stocks and shares ISAs are also available under this account. Fund management charges apply.

What are the benefits of the Chip app?

Chip’s instant access saver account saves the research and time of moving money around to get the best interest rates, as it seeks out the best providers with market-leading deals for all its customers. 

The autosave and savings goals features may also appeal to time-poor consumers who can rely on the AI technology and automation to ensure they’re saving as hard as possible. 

The autosave and recurrent saving features have charges for both savings and investment accounts, but these functions can be paused or stopped at any time.

There are platform charges for investors, with the ChipX fund offering a broad range of investment options and asset classes. The ISA option is only available for ChipX investors.

All Chip savings and investment accounts are covered by the Financial Services Compensation Scheme (FSCS), which gives up to £85,000 protection per person (not per account) in the event the provider goes bust.

Who is the Chip app suitable for?

If you’re someone who struggles to save regularly the Chip app could help remove some of the planning and discipline needed to build up a good savings habit. It offers consistently competitive cash savings rates due to its business model being designed to seek out the best deals for customers. 

But this comes at a cost. The autosave AI feature, which Chip prides itself on, carries a 45p per save charge. And, as autosave can typically take money from an account holder’s bank every four days or so to put into their Chip savings pot, the fees could soon mount up. 

The premium investment offering, ChipX could appeal to those who want to invest in alternative assets, such as cryptocurrency and gold funds, and on the plus side there are low platform charges and an ISA option is available. But investors must pay around £65 a year for the service. 

The basic investment account has no monthly or annual charge but offers a more limited range of funds.